Panic of 1837

The Panic of 1837 was a financial crisis in the United States which occurred in 1837, early in the presidency of Martin Van Buren. Bad harvests in Europe and a large trade imbalance between Britain and the United States caused the Bank of England to start calling in loans to American merchants, and failures in crop markets and a 30% downturn in international cotton prices led to the growing disaster. Cotton merchants in the American South could no longer meet their obligations to New York creditors, whose firms began to fail, 98% of them between March and April 1837 alone. Prices of stocks, bonds, and real estate fell 30% to 40%, and the credit market tumbled. Some Whig leaders blamed Andrew Jackson's anti-bank and hard-money policies for the ruin, while others framed the devastation as retribution for the speculation frenzy which had gripped the nation. In other circles, people blamed the profit-maximizing capitalist system as the cause and looked to Britain and France for socialist ideas calling for the common ownership of the means of production, and several thousand Americans developed utopian alternative communities during the early 1840s. By 1838, the panic had subsided, but 1839 saw another run on the banks and ripples of business failures, and a second panic occurred. The panic led to the destruction of Van Buren's hopes of a second term in office, and he lost for re-election to Whig William Henry Harrison in 1840, losing with 60 electoral votes to Van Buren's 234.